Evercore(EVR) - 2021 Q2 - Quarterly Report

Part I. Financial Information Item 1. Financial Statements This section presents unaudited condensed consolidated financial statements and detailed notes on accounting policies, revenue, investments, debt, equity, and segment results Condensed Consolidated Statements of Financial Condition Condensed Consolidated Statements of Financial Condition (dollars in thousands) | Metric | June 30, 2021 | December 31, 2020 | | :----- | :------------ | :---------------- | | Total Assets | $2,947,448 | $3,370,888 | | Total Liabilities | $1,522,181 | $1,881,514 | | Total Equity | $1,425,267 | $1,489,374 | Condensed Consolidated Statements of Operations Condensed Consolidated Statements of Operations (dollars in thousands, except per share data) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenues | $692,171 | $512,404 | $1,359,051 | $945,451 | | Net Revenues | $687,865 | $507,075 | $1,350,175 | $934,082 | | Total Expenses | $480,852 | $420,346 | $948,954 | $798,050 | | Net Income Attributable to Evercore Inc. | $140,359 | $56,412 | $284,711 | $87,587 | | Diluted EPS | $3.21 | $1.35 | $6.46 | $2.08 | Condensed Consolidated Statements of Comprehensive Income Condensed Consolidated Statements of Comprehensive Income (dollars in thousands) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Income | $163,929 | $67,228 | $329,480 | $106,108 | | Other Comprehensive Income (Loss) | $1,339 | $903 | $2,934 | ($11,338) | | Comprehensive Income Attributable to Evercore Inc. | $141,529 | $57,173 | $287,242 | $78,016 | Condensed Consolidated Statements of Changes in Equity Changes in Equity (dollars in thousands) | Metric | Balance at Dec 31, 2020 | Net Income (6 months) | Treasury Stock Purchases (6 months) | Dividends (6 months) | Balance at June 30, 2021 | | :----- | :---------------------- | :-------------------- | :---------------------------------- | :------------------- | :----------------------- | | Total Equity | $1,489,374 | $329,480 | ($424,806) | ($60,024) | $1,425,267 | Condensed Consolidated Statements of Cash Flows Condensed Consolidated Statements of Cash Flows (dollars in thousands) | Activity | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :------- | :----------------------------- | :----------------------------- | | Net Cash Provided by Operating Activities | $114,458 | $118,770 | | Net Cash Provided by Investing Activities | $11,968 | $483,616 | | Net Cash Used in Financing Activities | ($517,217) | ($214,410) | | Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | ($387,233) | $381,134 | | Cash, Cash Equivalents and Restricted Cash – End of Period | $450,991 | $1,025,020 | Notes to Unaudited Condensed Consolidated Financial Statements Note 1 – Organization - Evercore Inc. is an investment banking and investment management firm, operating as a holding company for Evercore LP and its subsidiaries across North America, Europe, the Middle East, and Asia[24] - The Investment Banking segment offers advisory services for M&A, restructuring, capital markets, underwriting, and equity research/trading[25] - The Investment Management segment includes wealth management for high-net-worth individuals and private equity interests, with the institutional asset management business (including ECB) sold in 2020[26] Note 2 – Significant Accounting Policies - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP and include all necessary adjustments for fair presentation[28] - The Company consolidates all subsidiaries where it has a controlling financial interest and variable interest entities (VIEs) where it is the primary beneficiary, such as Evercore LP and several international entities[29][30][32] - Certain prior period balances on the Unaudited Condensed Consolidated Statements of Operations were reclassified, including renaming 'Commissions and Related Fees' to 'Commissions and Related Revenue' and reclassifying principal trading gains/losses[33][34][35] Note 3 – Recent Accounting Pronouncements - The Company adopted ASU 2019-12 (Income Taxes) and ASU 2020-01 (Equity Securities) on January 1, 2021, with no material impact on its financial condition, results of operations, or cash flows[36][37] - The Company is currently assessing the impact of ASU 2020-06 (Accounting for Convertible Instruments and Contracts in an Entity's Own Equity), effective after December 15, 2021[39] Note 4 – Revenue and Accounts Receivable Revenue by Segment and Type (dollars in thousands) | Revenue Type | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :----------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Advisory Fees | $560,814 | $336,436 | $1,072,732 | $695,000 | | Underwriting Fees | $48,048 | $93,565 | $127,305 | $114,683 | | Commissions and Related Revenue | $50,725 | $54,334 | $104,251 | $109,900 | | Asset Management and Administration Fees | $16,183 | $12,953 | $31,132 | $25,700 | | Total Investment Banking | $659,587 | $484,335 | $1,304,288 | $919,583 | | Total Investment Management | $16,183 | $12,953 | $31,132 | $25,700 | Contract Balances (dollars in thousands) | Metric | Balance at Jan 1, 2021 | Increase (Decrease) | Balance at June 30, 2021 | | :----- | :--------------------- | :------------------ | :----------------------- | | Receivables (Current) | $368,346 | ($39,803) | $328,543 | | Contract Assets (Current) | $29,327 | $25,438 | $54,765 | | Deferred Revenue (Current) | $9,373 | $2,280 | $11,653 | - Bad debt expense, net of reversals, was ($1,766) for the six months ended June 30, 2021, compared to $5,331 for the same period in 2020, primarily due to a decrease in the current period provision of expected credit losses and recoveries[46][47](